Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: October 20, 2014 CITY HALL, ROOM 302B TIME: 10:00 A.M. Present: Doug Bagwell, Gail Budrow-Bradstreet, Stan Chubinski, John Hausman, and Joe Newman. Absent: None. Also Present: Tim Wendt of Plante Moran Financial Advisors (PMFA) and Linda Morrison, Finance and Revenue Services Director. Chair Newman asked for approval of the agenda. Motion Hausman, seconded Chubinski to approve the agenda. On a voice vote, motion carried. Minutes of the regular meeting of September 22, 2014 were presented. Motion Bagwell, seconded Hausman to approve the minutes as presented. On a voice vote, motion carried. A summary of assets prepared by Comerica Bank was presented. As of 9/30/14 the market value of our portfolio was $130,577,966 which is a loss of $2,788,855 since 8/31/14. As of today the market value of our portfolio is $127,500,341, presently a loss of $3,077,625 since the 9/30/14 month end. The market correction eroded all gains back to November 30, 2013. Motion Chubinski, seconded Hausman to accept the financial report as submitted. On a voice vote, motion carried. Board Reports Bagwell – none. Budrow-Bradstreet: New hires: Police Dept – Craig W Long on 9/29/14. Legal counsel reviewed a number of FAC policies and provided two samples for the Board. Budrow-Bradstreet will suggest policy wording to address the concerns regarding how Workers Compensation is handled as it relates to the time frame for FAC and the process for calculating FAC based on one year increments. Will submit to legal counsel for final review, any recommended wording to convey the meaning and final recommendation to the Board. Budrow-Bradstreet shared with Board a recent request for purchase of military time greater than the 12 months allowed by City policy as adopted by City Commission March 21, 2006 (Resolution 119). Chubinski – none. Hausman – none. Newman – none. Old Business Disability Pension Application – Still waiting on formal report from applicant’s physician. Per legal counsel preliminary opinion, a third independent medical examination (IME) is not required if there are two concurring opinions already. Per discussion and Chair direction, Police & Fire Pension Board October 20, 2014 Page 2 of 2 - Official when report comes in, if the opinion is the same as P&F’s IME a special meeting will be called to act on the application. New Business Tim Wendt of PMFA gave the market update highlighting the following:  Interest rates continue to fall resulting in gains for bonds.  Things like Ebola and ISIS do not seem to be impacting the market; however, the economic slow- down in Europe and China so seem to be impacting the market;  PMFA - not ready to throw in the towel on this bull market;  Domestic data is generally positive; profit margins, which expanded over last five years are beginning to tighten.  Now that we’ve had a correction (10% or more) it is a likely scenario that the market will continue to gain; that it is still a bull market;  Interest rates are not likely to fall much further; 10-year low was 1.38%; at 2% right now;  Feels like we are at the end of the bond gains and may lose some of the fixed income returns by year end; Wendt reviewed the P&F portfolio noting the following:  Fixed income returns outperformed the benchmark  Large cap underperformed due to stock selection and allocation decisions that did not pan out over this period of time; Robeco Large Cap is focused on high quality, high dividend paying stocks; the lower dividend paying companies are the ones doing well.  Net performance is below benchmark with the underperforming large cap investments impacting the gains made by the other investments (fixed income, small cap value, international equities).  Time weighted return (TWR) net of fees for the calendar year is 2.07% and below the 2.85% benchmark. TWR for the fiscal year through 9/30/14 is -1.95% and slightly greater than the benchmark of -1.58%.  Raised $3,000,000 cash in September in front of the large cap losses.  If things continue to fall and interest rates hold we may want to rebalance but not at this time; change is not large enough to warrant; still thinks there is room to go on the bull market. Public Comment - None. Next regular meeting: Tuesday, November 18, 2014 at 10:00 a.m. Meeting adjourned at 11:00 a.m. Respectfully submitted, Gail Budrow-Bradstreet, Secretary __________________________________ _________________________________ Board Member signature Board Member signature